Evaluating the feasibility of local cooperative consolidations: A case study

✍ Scribed by David G. Barton; Ted C. Schroeder; Allen M. Featherstone

• Publisher: John Wiley and Sons
• Year: 1993
• Tongue: English
• Weight: 747 KB
• Volume: 9
• Category: Article
• ISSN: 0742-4477
• DOI: 10.1002/1520-6297(199305)9:3<281::aid-agr2720090308>3.0.co;2-x

✦ Synopsis

Agricultural cooperatives have undergone significant consolidation in Iecent years. Identifying firms with a potential to improve performance via merging requires an examination of financial performance of those firms relative to firms of similar and larger sixes. This study develops a set of financial performance measures relative to firm size to identify cooperatives with the greatest potential to improve performance from merging. The suggested approach is applied in a case study for two pilot groups of Kansas cooperatives slated as merger candidates. 0 1993 John Wiley & Sons, Inc.

Concentration of local cooperatives has increased steadily paralleling the decline in US farm numbers over the last 60 years. US cooperative numbers declined 60% and US farm numbers declined 65% from 1929 to 1989 (Fig. 1). * Much of the increased concentration of cooperatives has been a result of local mergers. Although consolidation has been commonplace, methods for identifying local cooperatives with the most potential to gain from merging have not been well

The authors acknowledge the cooperation and support of Farmland Industries in conducting this research. The authors acknowledge the helpful cornnients of two anonymous reviewers.